The Delhi Financial Corporation (DFC) has launched a one-time settlement scheme for defaulters to unburden itself from non-performing assets (NPAs), currently at a whopping 20%. The corporation expects the scheme would bring the level of NPAs down to 10% by the end of the current financial year.
Although the situation has improved for the corporation over the years, it still has Rs 19.8-crore NPAs in its books, almost double the amount of loan disbursed in 2008-09. As per RBI guidelines, if a borrower does not pay an installment for more than 90 days, the dues become NPAs.
?The main objective of the scheme is to get the principal amount back, at least. We can waive a part of interest,? corporation?s chairman and managing director Sanjay Pratap Singh told FE.
The corporation has implemented similar scheme from March 2004 to March 2007 and successfully reduced the level of NPAs from 46% to 22%. In the following year, the NPA figure came down to 20%. ?Our endeavour is to bring our NPAs still lower. We want to lower our NPAs to single digit,? he said.
As per the terms of the scheme, fixed in the board meeting on April 29, the defaulter has to pay the entire amount in lump sum within one month from the date of receiving the letter of payment. If the borrower is unable to pay in lump sum, an amount of 25% of approved settlement money has to be paid within one month and the rest should be paid within one year with simple interest. The corporation is governed by State Financial Corporation Act 1951 and RBI guidelines are not applicable on its operations. However, the corporation refers to RBI norms as a benchmark. The DFC caters to transport, realty and industrial sectors in Delhi and Chandigarh. It organises funds from Small industries development bank of India (Sidbi) and internal accruals.